Making the shoe really fit
Gov. Jerry Brown has revealed his revised budget for state spending, thus launching the annual budget dance with the state Legislature.
Maybe “dance” isn’t the appropriate word. Perhaps “battle” would be a better choice.
Brown’s budget plan totals $137.6 billion, which is $6 billion higher than his preliminary proposal made in January. The bump up is a result of better-than-expected revenues, mostly because April state income returns exceeded expectations.
Thus, Brown’s belief that the budget features an $8.8-billion surplus, most of which the governor believes should be socked away in the state’s reserve fund.
It’s all supposition at this point, because the actual surplus — if there is one — will be fought over by majority Democrats in the Legislature, with minority Republicans in both the Assembly and Senate in the usual policy tug-of-war.
Democrats are already talking about boosting spending on health-care services, especially for the poor and undocumented residents. The point the majority party leaders are making is that if California is in the midst of good economic times, the benefits should accrue to all Californians.
Republicans in the Legislature point out that Brown’s proposed budget of $137.6 billion, with its anticipated surplus, does not acknowledge the realities of state finances, the $200-billion portion of which includes outstanding state debt and other fiscal liabilities.
And the GOP faction correctly asks why various state taxes continue to be increased when there is a budget surplus.
Like we said earlier, expect a legislative battle between now and mid-June, which is when the state Constitution requires a signed budget. In fact, if the two sides — three sides really, when you count the governor — can’t agree by midnight of June 15, lawmakers’ pay can be cut.
That would be a reasonable policy at the federal level, docking pay when lawmakers fail to do their jobs. But don’t hold your breath on that one.
We have to admit that this budget cycle is a stark turnaround for state government. As recently as 2011, when Brown took office for the second time in his life, the state budget was wallowing $25 billion in the red. But since then the economy has been cooking, putting more money in the pockets of mostly wealthy business owners, who pony up two-thirds of the income tax revenue each year.
We like Brown’s plan to enhance the state’s reserve fund, because as we’ve all witnessed in recent years, California has and will continue to have pressing needs to pay up for unanticipated calamities.
Government in general has this annoying habit of ramping up spending in the economically fat years, while not worrying about the lean years. But the lean years always, always come around.
For example, it’s a safe bet that we’re in for another monstrous wildfire season, because once again, California is becoming bone dry. The state’s firefighting agencies are asking for more money, knowing what’s coming in the months and perhaps years ahead.
We also have to plan for extended periods of drought, torrential rains and flooding, earthquakes — you name it, we’ve got it, and it all needs to be paid for when and after it happens.
And the state’s solid economy also is on unsteady ground. The first sign that economic growth may be on the ropes can be found in rising gasoline prices. When the dominoes start falling, it’s best to just stay out of the way.
Still, California needs a proactive budget and spending plan. With the world’s fifth-largest economy, that’s important.